Exam 8: Firms,the Stock Market,and Corporate Governance

If a stock's dividend is expected to grow at a constant rate of eight percent in the future and it has just paid a dividend of $1.25 a share,and you have an alternative investment of equal risk that will earn a 12 percent rate of return,what would you be willing to pay per share for this stock?

Why do corporations want to keep the price of their stock high?

Which of the following would be considered an implicit cost of operating a business?

Mutual funds sell shares to investors and use the funds to

Mortgage-backed securities are groups of mortgages that are bundled together and sold to investors.

By the percentage of each type of business organization in the United States,rank sole proprietorships,partnerships,and corporations in terms of the number of firms,revenue,and profits.

Of the types of business organizations in the United States,corporations account for ________ percentage of firms and ________ percentage of profits.

If the present value equation used to calculate the price of a stock you are considering buying is "[$12 / (0.05 - 0.02)]," which of the following is correct,assuming that dividends will grow at a constant rate?

Who controls a sole proprietorship?

Securities dealers that trade stocks and bonds outside exchanges comprise the

How is the separation of ownership from control related to the principal-agent problem?

What Congressional act,enacted in 1933 and repealed in 1999,prevented financial firms from being both commercial banks and investment banks?

You purchase a share of Facebook stock from a friend who purchased the stock 1 year ago.Your purchase of the stock represents a transaction in the primary financial market

Over ninety-five percent of all new businesses that open each year in the United States employ ________ workers.

Generally with bond ratings,the higher the rating,the ________ the interest rate an investor will receive and the ________ the risk that the issuer of the bond will default.

Corporate managers and shareholders always have the same goals.

Assume you set up a sole proprietorship and your lawyer tells you that as the owner,you could stand to lose your personal wealth if the business goes bankrupt.This means a sole proprietorship

The person hired by a corporation's board of directors to run the day-to-day operations of the corporation is known as the

Veruca sells therapeutic bath salts on the Internet.Her annual revenue is $52,000 per year,the explicit costs of her business are $14,000,and the opportunity costs of her business are $17,000 per year.What are the implicit costs of her business?

Jeremy is thinking of starting up a small business selling NASCAR memorabilia.He is considering setting up his business as a corporation.What is one advantage to Jeremy of setting up his business as a corporation?